Earn a projected 7.5% tax-free with an ISA1
The Funding Circle ISA is open exclusively to current investors. We’re inviting them gradually, then we will open it to new investors. Register your interest today and we’ll let you know when it’s available.
Your actual return may be higher or lower and your capital is at risk.
- Proven track record over 7 years
- Earn interest tax-free
- Easy to manage online account
- No fees to access your money
- Support 100s of British businesses
Lent to UK businesses since 2010
Innovative Finance ISA
A new type of ISA for online lending
Individual Savings Accounts (ISAs) are accounts for savings and investments that let you earn tax-free returns. This tax year you have a subscription of £20,000 which can be split between a Cash ISA, Stocks & Shares ISA, Lifetime ISA and an Innovative Finance ISA.
An Innovative Finance ISA allows you to earn tax-free returns by lending to businesses through Funding Circle.3
- The projected return is an estimate of what investors could earn on the Balanced lending option, after fees and bad debt. It uses the loans we expect to be funded on the platform, and the estimated bad debt rate of those loans based on our all-time loan data. See the full calculation here.
- Interest earned is after fees and bad debt. Please note, past performance is not a guarantee of future performance.
- The tax-free entitlement of an ISA depends on the individual circumstances of each investor, and may be subject to change in the future.
Funding Circle has been the most lucrative [peer-to-peer platform]. Since I joined in August 2012, drip feeding cash in, my returns, after all fees and bad debt adjustment, have been 6.2pc.Martin Lewis, writing in The Daily Telegraph, 2013
How lending works
At Funding Circle you lend directly to established small British businesses. They get the funds they need to grow, and you can earn attractive returns as they pay you back each month.
Choose your lending option
To help you get the return you’re looking for, you can choose between two lending options. You can switch lending options at any time in your account.
- You lend to the full range of creditworthy businesses to build a balanced portfolio
- This option has a higher projected return, with a higher estimated bad debt rate
- You only lend to creditworthy businesses that have been assessed as lower risk
- This option has a lower projected return, with a lower estimated bad debt rate
- The rates shown are the projected returns, after fees and bad debts, but before tax, that a diversified investor could earn with each lending option. These rates may change over time, and your actual return may be higher or lower. By lending to businesses your capital is at risk.
Earn tax-free with an ISA
The Funding Circle ISA works just like our Classic account. Once you’ve received your invitation, you can set up your account in minutes, then use our automatic tool to earn attractive, tax-free returns.
When we're confident your money will be lent out quickly, you'll also be able to transfer balances from any existing ISAs to earn even more.
Receive your invitation
We’ll tell you how to set up your account in minutes, then transfer money from your debit card.
Start lending automatically
Our automatic lending tool allows you to lend small amounts to hundreds of different businesses.
Receive monthly repayments
You’ll typically receive repayments with interest each month from the businesses you’ve lent to.
Repayments are reinvested
By keeping our lending tool switched on, your repayments will then be lent out again to help maximise your earnings.
Limits and transfers
You can only open one Innovative Finance ISA in any tax year. There is a subscription limit of £20,000 this tax year, which you can split across all types of ISA.
Currently we’re not accepting transfers from other ISA providers. We will open transfers in the future, and will keep you updated when they are available.
To help you build a well diversified portfolio for a more stable return, we recommend lending £2,000 or more. If you’d like to start with less, the minimum initial transfer is £1,000.
Accessing your funds
Your funds will be lent to businesses who borrow over 6 months to 5 years, but you have options to access your money at any stage. When you’re ready you have two options:
Withdraw as you go
Turn off reinvesting and withdraw your repayments as they come in.
Withdraw a lump sum
Select the amount you’d like to withdraw, and sell your active loans to other investors using our automatic selling tool.
If you want to transfer your ISA to another provider, you must sell your loans first and transfer the cash raised. Any loans that cannot be sold may no longer be eligible for tax-free interest. Please read our FAQs for more detail.
There are no fees for selling loans. While usually very fast, selling loans is not instant and depends on demand from other investors looking to buy at that time. You can only sell active loans with no credit issues, and not in the last month of their term.
ISA key facts and features
- You have a subscription of £20,000 this year which can be split across all ISA types
- You must be 18+ years of age and a UK resident
- You need a National Insurance number to apply
- You can only subscribe to one Innovative Finance ISA per year
The Funding Circle ISA:
- We are gradually inviting current investors who have lent since 1st May 2017. Investors with inactive funds, or those who sign up after that date, will be able to access the ISA once all active investors have been invited.
- The Funding Circle ISA is a flexi ISA. Under ISA rules you can take your money out of your ISA account and put it back later in the same tax year, without losing your tax-free entitlement.
- The Funding Circle ISA requires a minimum initial investment of £1,000
- You cannot transfer funds directly from a Classic account to an ISA account. You must first sell your loans, then transfer the money raised into your ISA account.
- Currently we’re not accepting transfers from other ISA providers. We will open transfers in the future, and we’ll let you know when they are available.
- In the unlikely event that Funding Circle goes out of business, you would continue to receive repayments for your loans and our back-up service provider would administer the ISA for you.
Register your interest for the Funding Circle ISA
Enter your details and we’ll let you know when our ISA is available to new investors.
How do we manage risk?
Only established businesses who have passed our rigorous credit assessment process can borrow through Funding Circle. However, it’s important to remember that some businesses will not be able to fully repay their loan. We call this a bad debt, and it’s already accounted for in your projected return.
Diversification is the best way to manage risk. This simply means spreading your lending across hundreds of businesses, lending small amounts to each one. To help you build a well diversified portfolio for a more stable return, we recommend lending £2,000 or more. If you’d like to start with less, the minimum initial transfer is £1,000.
New to Funding Circle?
Ready to start lending? You can open a Classic account and start earning attractive returns today, then open an ISA when they’re available.
Already an investor?
We'll be in touch when you can open your ISA, with simple instructions of how to set it up in your account.